Opinion
Case No. 04 C 6618.
July 13, 2005
REPORT AND RECOMMENDATION
Plaintiffs, Kay Dawson and Claudell Turner, filed a Consolidated Amended Class Action Complaint alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). Pursuant to Federal Rule of Civil Procedure 23, plaintiffs move for class certification. The District Court referred the matter of class certification to us for a report and recommendation. For the following reasons, we recommend that the District Court grant plaintiffs' motion for class certification and certify a class.
Background
Plaintiff, Kay Dawson, filed a Class Action Complaint against Allied Interstate, Inc. ("Allied") on October 14, 2004. On November 9, 2004, Claudell Turner filed a Class Action Complaint against Allied. Thereafter, the court found that the matters were related. On February 25, 2005, Dawson and Turner filed their Consolidated Amended Class Action Complaint ("the Consolidated Complaint"). The Consolidated Complaint alleges that Allied is a debt collector as defined by § 1692a of the FDCPA because it regularly uses the mail or telephone to collect or attempt to collect delinquent consumer debts. The Consolidated Complaint further alleges that on February 9, 2004, Allied sent a letter to Dawson offering to settle her account for 50% of the outstanding balance if she contacted Allied within fifteen days. Turner also received a letter dated February 9, 2004 from Allied. In Turner's letter, Allied offered to settle his account for 70% of the outstanding balance if he contacted Allied within fifteen days. Plaintiffs allege that these letters are form debt collection letters which violate § 1692e of the FDCPA because Allied falsely stated that it was extending a discounted settlement offer for a limited time. Section 1692e of the FDCPA prohibits Allied from making any false, deceptive or misleading statements. Plaintiffs allege that Allied's statements in its form debt collection letters were false because Allied always had the authority to settle plaintiffs' accounts at a substantial discount.
Plaintiffs move for class certification and propose that the class be defined as: all persons similarly situated in the State of Illinois from whom Defendant Allied attempted to collect a delinquent consumer debt, allegedly owed to Capital One, from October 14, 2003 to October 14, 2004, via the same form collection letters it sent to plaintiffs (Dawson and Turner).
Analysis
Generally, class action certification is appropriate for FDCPA claims. Seidat v. Allied Interstate, Inc., 2003 WL 21468625, *1 (N.D. Ill. 2003). The special damage provisions and criteria in 15 U.S.C. §§ 1692k(a)(2)(B) and (b)(2) of the FDCPA specify how to assess damages for class actions. Id.
Plaintiffs bear the burden of demonstrating that class certification is appropriate. Id. In order for a class to be certified under Federal Rule of Civil Procedure 23, the named plaintiffs must demonstrate that the four requirements of Rule 23(a) are satisfied. Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993). The four requirements of Rule 23(a) are: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a). All of these elements are prerequisites to certification and failure to meet any one of them precludes certification as a class. Retired Chicago Police, 7 F.3d at 596.
Once the Rule 23(a) factors have been demonstrated, plaintiffs must establish that the class meets one of the three categories set forth in Federal Rule of Civil Procedure 23(b): (1) the prosecution by or against individual members of the class would create the risk of (a) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or (b) adjudication with respect to the individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially, impair or impede their ability to protect their interests; or (2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or (3) the court finds that questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Fed.R.Civ.P. 23(b).
Plaintiffs contend that 23(b)(3) is the appropriate category. In response, Allied argues that plaintiffs have failed to establish the Rule 23(a)(2) and (3) requirements as well as the Rule 23(b)(3) requirements.
A. Numerosity and Adequacy of Representation
First, we analyze the Rule 23(a) requirements. Allied admits that plaintiffs have met the numerosity requirement under Rule 23(a)(1). We agree. The proposed class consists of 792 persons and thus, numerosity is not at issue here. See McCabe v. Crawford Co., 210 F.R.D. 631, 643 (N.D. Ill. 2002) (recognizing that a class of forty is generally sufficient to satisfy Rule 23(a)(1)).
Allied does not challenge the Rule 23(a)(4) requirement that the representative parties will fairly and adequately protect the interests of the class. The adequacy of representation requirement has three elements: (1) the chosen class representative cannot have antagonistic or conflicting claims with other members of the class; (2) the named representative must have a "sufficient interest in the outcome to ensure vigorous advocacy"; and (3) counsel for the named plaintiff must be competent, experienced, qualified, and generally able to conduct the proposed litigation vigorously. Gammon v. GC Servs. Ltd. Partnership, 162 F.R.D. 313, 317 (N.D. Ill. 1995).
Here, plaintiffs received the same form debt collection letters as the members of the proposed class. Plaintiffs' claims are identical to the claims of the proposed class and there is no showing that any antagonistic or conflicting claims exist. Indeed, all potential class members contend that Allied's form debt collection letters violate the FDCPA by making false statements regarding limited time settlement offers. Plaintiffs have a sufficient interest in the outcome of the litigation because both plaintiffs and the members of the proposed class stand to recover damages if successful. Finally, based on the affidavits of counsel, we find that plaintiffs' attorneys are competent, experienced and qualified to handle the proposed class action. Accordingly, plaintiffs are adequate class representatives under Rule 23(a)(4).
B. Commonality and Typicality
Both the 23(a)(2) commonality and 23(a)(3) typicality requirements are closely related. Rosario v. Livadits, 963 F.2d 1013, 1018 (7th Cir. 1992). Rule 23(a)(2) requires that the class have common questions of law or fact. Rule 23(a)(3) requires that the claims of the class representative be typical of the claims of the class. Indeed, the class representative's claims must have the same essential characteristics as the claims of the class. Retired Chicago Police, 7 F.3d at 597 (citing De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983)).
"A plaintiff's claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members and his or her claims are based on the same legal theory." Retired Chicago Police, 7 F.3d at 597. Here, plaintiffs' claims are typical of the proposed class because they are brought pursuant to the FDCPA and relate to identical form debt collection letters. Therefore, plaintiffs' claims involved the same course of conduct by Allied that gives rise to the claims of the other class members.
Plaintiffs need only demonstrate that there is at least one common question of law or fact in order to satisfy the Rule 23(a) commonality requirement. Sledge v. Sands, 182 F.R.D. 255, 258 (N.D. Ill. 1998). As in Sledge, the central question in this litigation is whether Allied's debt collection letters violate the FDCPA. Id. In particular, all potential class members claim that Allied's form debt collection letters violate the FDCPA by making false, deceptive or misleading statements regarding limited time settlement offers. Accordingly, we find that there is a common legal issue for the class.
Allied contends that the plaintiffs have not established the commonality and typicality requirements because it is not clear that each member of the proposed class was treated the same before or following the expiration of the time period set forth in Allied's debt collection letters. Allied relies on Brider v. Nationwide Credit, Inc., 1998 WL 729727 (N.D. Ill. 1998), to support this argument. Allied attempted to challenge typicality on the same basis in Seidat v. Allied Interstate, Inc., 2003 WL 21468625, *4 (N.D. Ill. 2003), a similar case where the plaintiff alleged that Allied's limited time settlement offers were false and misleading. In Seidat, this Court found that the facts in Brider were distinguishable. Id. In particular, we stated:
In Brider, the defendant offered evidence to suggest that its normal debt collection practice differed from that used on the proposed class representative. Allied, however, fails to provide any evidence, whether concrete or constructive, that the collection practices used on Elle Seidat were atypical. Without proof to the contrary, plaintiff's assertion that Elle Seidat was subject to Allied's typical debt collection practices endures. Id.
As in Seidat, here, Allied has offered no evidence that the collection practices used on plaintiffs were atypical. Therefore, once again, we find that the facts in Brider are distinguishable from the case at hand.
Allied relies on Brider to support an argument identical to one we rejected in Seidat. This demonstrates that Allied either chose to ignore our holding in Seidat or failed to read the case. We find this especially offensive in light of the fact that attorneys from the Law Offices of Scott G. Thomas, who represented Allied in Seidat, also represent Allied in this case.
Because plaintiffs' claims arise from the same conduct as the claims of the other class members (the receipt of a similar form debt collection letter), plaintiffs satisfy the typicality requirement. Furthermore, plaintiffs satisfy the commonality requirement because their claims are based on the same legal theory as the claims of the other class member; namely, that the form debt collection letter was false, deceptive or misleading in violation of the FDCPA. See Jackson v. National Action Financial Services, Inc., 2005 WL 878303, *3 (N.D. Ill. 2003).
In sum, we find that plaintiffs have satisfied the requirements of Rule 23(a).
C. Predominance and Superiority
In addition to the four requirements of Rule 23(a), a party seeking class certification must demonstrate that one of the Rule 23(b) requirements is also met. Id. at *5. Certification under Rule 23(b)(3) is appropriate where questions of law or fact common to members of the class predominate over those questions affecting only individual members and a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676 (7th Cir. 2001).
In order to demonstrate that common questions predominate, plaintiffs must show that the issues common to the class outweigh any individual questions. Dhamer v. Bristol-Myers Squibb Co., 183 F.R.D. 520, 529 (N.D. Ill. 1998). The common issue here is whether the letters that Allied sent to the plaintiffs and the class members violate the FDCPA. As long as the letters that class members received are very similar or the same, as plaintiffs allege, the legal issue of whether those letters violate the FDCPA is predominate. See Jackson, 2005 WL 878303, *6. Allied points to no other individual issues that outweigh the question of whether Allied's letters violate the FDCPA. Instead, Allied relies on the proposition that the 23(b)(3) predominance classification and the 23(a)(2) commonality requirement are closely related so that a finding of one will generally satisfy a finding of the other. Clark v. Retrieval Masters Creditors Bureau, 185 F.R.D. 247, 250 (N.D. Ill. 1988). Because Allied asserts that commonality is not met, it argues that the class cannot be certified under 23(b)(3). However, as discussed above, plaintiffs have satisfied the commonality requirement. Thus, Allied's argument supports a finding that the Rule 23(b)(3) predominance requirement has been met. Consequently, we find that common questions of law and fact predominate here.
Furthermore, we find that a class action is the superior form of adjudication for this case. Many class members may not know of their rights under the FDCPA, they may not have a monetary incentive to individually litigate their rights, and they may be unable to hire competent counsel to protect their rights. Additionally, a class action is judicially efficient in lieu of clogging the courts with hundreds of individual lawsuits. Sledge, 182 F.R.D. at 259. As a result, we find that certification of the proposed class is appropriate under Rule 23(b)(3).
Based on the foregoing, we find that plaintiffs have demonstrated that their proposed class satisfies the four requirements of Rule 23(a) as well as Rule 23(b)(3).
Conclusion
For the reasons set forth above, this Court recommends that the District Court grant plaintiffs' motion for class certification. Specific written objections to this report and recommendation may be served and filed within 10 business days from the date that this order is served. Fed.R.Civ.P. 72. Failure to file objections with the District Court within the specified time will result in a waiver of the right to appeal all findings, factual and legal, made by this Court in the report and recommendation. Lorentzen v. Anderson Pest Control, 64 F.3d 327, 330 (7th Cir. 1995).